Homeowners looking to introduce energy efficiency measures into their homes will soon be able to take advantage of new green finance products.
The Government has launched a fund to boost the choice of affordable products for homeowners to help them reduce energy consumption.
Ministers are keen to scale up the green finance market and provide households with more choice of affordable finance options to retrofit their homes, helping them spend less on energy. It is part of wider efforts towards ensuring as many homes as possible to EPC band C by 2035 as possible.
Minister for Business, Energy and Corporate Responsibility, Lord Callanan, said: “Driving up the energy efficiency of homes won’t only reduce our impact on the climate, but will also help houses stay warmer for longer.
Green Home Finance Accelerator
“Green finance products will allow households with greater means to spread costs over time, empowering them to be able to invest in their properties, improving their energy efficiency and resale value.”
Up to £20 million is being made available for lenders and other organisations, through the Green Home Finance Accelerator, to develop new lending products which provide upfront and affordable capital to those who can afford it, to help make their homes more comfortable, cheaper to run and with lower carbon footprints.
The funding will be used to support lenders and other providers to develop, test, and pilot new and innovative green finance products that can help a wide range of homeowners overcome the upfront costs of larger retrofit. It also seeks to boost knowledge and understanding about green finance and how energy efficiency can make homes cheaper to run.
It follows the launch of the new Energy Price Guarantee, which has capped the bill for a typical UK household to an average of around £2,500 a year until April next year. It also comes in addition to the £400 energy bills discount for all UK households.
Upgrades for heating
Twenty per cent of emissions come from buildings and nearly two-thirds of owner-occupied homes are below EPC C rating, meaning their energy bills could be hundreds of pounds more than homes with a higher EPC rating.
The average EPC rating of owner-occupied homes is D. Owners of these properties can help push their homes to EPC C through various measures, depending on the property. This can often be by fitting small things like LED bulbs or heating controls. On other properties it might mean installing cavity wall and loft insulation and possibly insulating draughty floors, which together would cost on average £6,500. But these could save households over £300 a year on their energy bills.
“This funding will give more companies in the financial sector the opportunity to create and offer these products, and in so doing help households reap the benefits both in the investment to their properties, and in the savings they can make on their energy bills.
The announcement is the latest in a raft of measures designed to help improve the energy efficiency of the country’s housing stock.
The Government’s £12 billion Help to Heat schemes includes the £450 million Boiler Upgrade Scheme, which opened to voucher applications in May 2022. This is already incentivising people to move towards low carbon heating, offering grants of £5,000 towards the upfront cost of the installation of an air source heat pump, and £6,000 for a ground source heat pump.
The government is providing £4 billion between 2022 and 2026 to improve the energy efficiency of buildings, with 450,000 low-income households having their homes retrofitted with the likes of wall and loft insulation, solar panels and modern heating controls.
